Compulsory-Counterclaim Rule Law and Legal Definition
Compulsory-Counterclaim rule is a rule of the federal rules of civil procedure which requires a defendant to present every counterclaim arising out of the same transaction or occurrence that is the basis of the plaintiff's claim.[ Fed. R. Civ. P. 13(a)]. However most courts hold that if a party does not timely bring a compulsory counterclaim, the party is estopped from asserting the claim.
The following is a caselaw on the rule:Fed. R. Civ. P. 13(a), the compulsory-counterclaim rule, requires a defendant to plead any counterclaim which arises out of the transaction or occurrence that is the subject matter of the opposing party's claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction. The claim is not compulsory if it was the subject of another pending action at the time the action was commenced, or if the opposing party brought his suit by attachment or other process not resulting in personal jurisdiction but only in rem or quasi in rem jurisdiction. A counterclaim that is compulsory but is not brought is thereafter barred. If a counterclaim is compulsory, the federal court will have ancillary jurisdiction over it even though ordinarily it would be a matter for a state court.[Baker v. Gold Seal Liquors, Inc., 417 U.S. 467 (U.S. 1974)]